President's Letter
Dear Shareholder:
We are pleased to provide you with this semi-annual report for the
Dreyfus Michigan Municipal Money Market Fund, Inc. For the period ended
March 31, 1994, the annualized yield provided by the Fund was 2.02%.
After taking into account the effect of compounding, the annualized
effective yield was 2.04%.* Income dividends of approximately $.01 per
share paid during the period were exempt from Federal and State of
Michigan personal income taxes.**
At our last reporting, we were keeping a watchful eye on the status of
the U.S. economy, the direction of interest rates and any significant
variation in inflationary indicators. Early in the period, economic
numbers hinted that the nation's growth might be more anemic than
anticipated. With no strong threat of a rekindling of inflation, the
municipal market responded with strength providing some of the lowest
historical yields in both the bond and money markets. In a somewhat
unusual turn of events, assets of municipal money market funds increased
(at one point reaching an all-time high of over $116 billion) despite the
unprecedented low yield environment.
In the first quarter of 1994, signs of economic strength began to emerge
along with the specter of a tighter Federal Reserve Board policy. On
February 4, through a direct announcement by Chairman Alan Greenspan, the
Federal Reserve Board raised the Federal Funds rate (for the first time
in five years) from 3% to 3.25%. Since then, there have been two
additional increases. The initial short-term market reaction was a rise
in rates. However, as investors responded to uncertainty in the long-term
bond and equity markets, the shorter-term money funds began to see an
even greater inflow of assets. As a result, tax exempt money market
assets have increased almost 4% since early February. During this same
period, state-specific funds gained over $1.5 billion in assets,
representing an increase of just under 5%. This increased demand for
short-term tax exempt paper will produce lower yields for tax exempt
money market funds. However, given the new tax structure, on a taxable
equivalent basis, tax exempt yields continue to provide an attractive
alternative to taxable money market investments.
We expect technical factors (supply/demand) in the tax exempt money
market to play a significant role in the coming months. In late April,
the short-term funds typically see an outflow of assets as investors
redeem shares to meet tax payment needs. In this environment, the
decreased demand for short-term securities places temporary upward
pressure on yields. Our strategy in the coming weeks will be to choose
carefully among the investment alternatives and seek to benefit from any
periods of market weakness. At the same time, of course, we will continue
to follow any expected moves by the Federal Reserve Board. Our
conservative portfolio approach of selectively investing in the municipal
note market enabled the Fund to continuously rank among the highest-
yielding funds in its universe of Michigan tax exempt money market
funds.(dagger)
We have included a current Statement of Investments and recent financial
statements for your review. We look forward to serving your investment
needs in the future.
Very truly yours,
Richard J. Moynihan
President
April 15, 1994
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
** Some income may be subject to the Federal Alternative Minimum Tax
(AMT) for certain shareholders.
(dagger)Source: IBC/Donoghue's Money Fund Report, 7-day yields as
reported for this 6-month reporting period. Rankings reflect the
absorption of certain Fund expenses which may be terminated. Without
such absorption, the Fund's rankings might have been lower. Yield
fluctuates and past performance is no guarantee of future results.
<TABLE>
<CAPTION>
Dreyfus Michigan Municipal Money Market Fund, Inc.
Statement of Investments March 31, 1994 (Unaudited)
Principal
Tax Exempt Investments--100.0% Amount Value
------------- -------------
<S> <C> <C>
Michigan--96.0%
Birmingham, EDR, Limited Obligation, VRDN:
(Barclay Inn Association Project) 2.575% (LOC; Bankers Trust) (a,b) $1,800,000 $ 1,800,000
(Brown Street Association Project) 2.575% (LOC; Bankers Trust) (a,b) 2,000,000 2,000,000
Dearborn Economic Development Corp., LOR, VRDN
(Oak Brook Common Project) 2.35% (LOC; Mellon Bank) (a,b) 1,000,000 1,000,000
Grand Rapids Economic Development Corp., Revenue, VRDN:
(Amway/Grand Plaza Hotel) 2.35% (LOC; Old Kent Bank and Trust) (a,b) 1,000,000 1,000,000
Limited Obligation, Refunding (Calder)
2.35%, Series A (LOC; Old Kent Bank and Trust) (a,b) 1,000,000 1,000,000
Grosse Point Public School System, TAN 2.50%, 4/1/94 1,900,000 1,900,000
Kalamazoo County Economic Development Corp., Industrial and Economic
Development Revenue, VRDN (WBC Properties Limited Project)
2.40% (LOC; Old Kent Bank and Trust) (a,b) 3,000,000 3,000,000
Michigan Housing Development Authority: LOR, Refunding, VRDN (Harbortown Limited)
2.325% (LOC; Bankers Trust) (a,b) 5,000,000 5,000,000
MFHR, CP 2.50%, Series A, 4/15/94 (LOC; Sanwa Bank) (b) 2,000,000 2,000,000
Rental Housing Revenue, Refunding:
3.10%, Series C, 2/28/95 (LOC; Credit Suisse) (b) 5,750,000 5,750,000
VRDN 2.50%, Series A, 4/1/94 (Insured; AMBAC) 2,185,000 2,185,000
Michigan Job Development Authority, PCR, VRDN
(Mazda Motor Manufacturing USA Corp. Project) 2.15% (LOC; Sumitomo Bank) (a,b)3,000,000 3,000,000
Michigan Municipal Bond Authority, RAN:
3%, Series A-2, 5/5/94 (LOC; Comerica Bank) (b) 3,385,000 3,386,692
3%, Series B-24, 7/28/94 (LOC; Comerica Bank) (b) 3,000,000 3,002,116
Michigan Strategic Fund:
LOR:
Bonds, Refunding (Consumers Power Co. Project)
2.65%, Series A, 6/15/94 (LOC; Canadian Imperial Bank of Commerce) (b) 3,000,000 3,000,000
VRDN:
2.70%, Series C-1 (LOC; Comerica Bank) (a,b) 2,350,000 2,350,000
(Coil Center Corp. Project) 3.20% (LOC; Tokai Bank) (a,b) 1,000,000 1,000,000
(Fritz and Caroline Huebner Trust/Plascore)
2.70%, Series B-2 (LOC; Comerica Bank) (a,b) 975,000 975,000
(Hi-Lex Controls Inc. Project) 2.45% (LOC; Bank of Tokyo) (a,b) 2,900,000 2,900,000
(K&M Machine Fabric) 2.70%, Series A-4 (LOC; Comerica Bank) (a,b) 1,250,000 1,250,000
Refunding (Louisiana-Pacific Corp.) 2.35% (LOC; Wachovia Bank) 2,600,000 2,600,000
(Thorn Apple Valley Inc. Project) 2.65% (LOC; Old Kent Bank and Trust) (a,b) 1,500,000 1,500,000
PCR:
CP (Dow Chemical Co. Project)
2.25%, 4/12/94 (Corp. Guaranty; Dow Chemical Co.) 1,800,000 1,800,000
VRDN, Refunding (Consumer Power Co. Project)
2.85%, Series A (LOC; Union Bank of Switzerland) (a,b) 2,000,000 2,000,000
Solid Waste Disposal Revenue, VRDN (Genesee Power Station Project)
2.90% (LOC; Canadian Imperial Bank of Commerce) (a,b) 2,000,000 2,000,000
Midland County Economic Development Corp., Economic Development,
LOR, Refunding, VRDN (Dow Chemical Co. Project)
3.05% (Corp. Guaranty; Dow Chemical Co.) (a) $3,600,000 $3,600,000
Monroe County, Economic Development, LOR, Refunding, VRDN
(Detroit Edison) 2.95% (LOC; Barclays Bank) (a,b) 2,800,000 2,800,000
City of Royal Oak, School District, TAN 2.75%, 4/1/94 3,000,000 3,000,000
Sterling Heights Economic Development Corp., LOR, Refunding,
VRDN (Sterling Shopping Center) 2.40% (LOC; National Bank of Detroit) (a,b) 1,475,000 1,475,000
Troy City School District, Refunding, GO Notes 2.65%, 5/1/94 (Insured; AMBAC) 1,000,000 1,000,000
University of Michigan, University Revenue, BAN 3.125%, 6/30/94 3,000,000 3,004,202
U.S. Related--4.0%
Commonwealth of Puerto Rico, TRAN 3%, Series A, 7/29/94 3,000,000 3,002,877
-------------
TOTAL INVESTMENTS (cost $75,277,714) $75,280,887
=============
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
BAN Bond Anticipation Notes PCR Pollution Control Revenue
CP Commercial Paper RAN Revenue Anticipation Notes
EDR Economic Development Revenue TAN Tax Anticipation Notes
GO General Obligation TRAN Tax and Revenue Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
LOR Limited Obligation Revenue
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings
Moody's or Standard & Poor's Percentage of Value
- -------- -------------------- ----------------------
<S> <C> <C>
VMIG1/MIG1, P1 (c) SP1+/SP1, A1+/A1 (c) 75.3%
Aaa/Aa (d) AAA/AA (d) 20.7
Not Rated (e) Not Rated (e) 4.0
-------
100.0%
=======
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(b) Secured by letters of credit. At March 31, 1994, 78.0% of the Fund's
net assets are backed by letters of credit issued by domestic and foreign
banks, of which Bankers Trust and Comerica Bank provided letters of
credit to 12.3% and 15.3%, respectively, of the Fund's net assets.
(c) P1 and A1 are the highest ratings assigned tax-exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(d) Notes which are not MIG or SP rated are represented by bond ratings
of the issuers.
(e) Securities which, while not rated by Moody's and Standard & Poor's,
respectively, have been determined by the Fund's Board of Directors to be
of comparable quality to those rated securities in which the Fund may
invest.
(f) At March 31, 1994, the Fund had $25,675,000 (35.9% of net assets)
invested in securities whose payment of prinicipal and interest is
dependent upon revenues generated from industrial projects.
See independent accountants' review report and notes to financial
statements.
<TABLE>
<CAPTION>
Dreyfus Michigan Municipal Money Market Fund, Inc.
Statement of Assets and Liabilities March 31, 1994 (Unaudited)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $75,277,714)--see statement $75,280,887
Cash 824,264
Interest receivable 526,491
Prepaid expenses 19,383
-----------
76,651,025
LIABILITIES:
Due to The Dreyfus Corporation 18,047
Payable for investment securities purchased 5,010,722
Accrued expenses and other liabilities 73,139 5,101,908
----------- -----------
NET ASSETS $71,549,117
===========
REPRESENTED BY:
Paid-in capital $71,551,189
Accumulated net realized (loss) on investments (5,245)
Accumulated gross unrealized appreciation on investments 3,173
-----------
NET ASSETS at value applicable to 71,551,189 outstanding shares of
Common Stock, equivalent to $1.00 per share
(1 billion shares of $.001 par value authorized) $71,549,117
===========
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations six months ended March 31, 1994 (Unaudited)
<S> <C> <C>
INVESTMENT INCOME:
Interest Income $938,278
Expenses:
Management fee--Note 2(a) $183,113
Shareholder servicing costs--Note 2(b) 54,527
Professional fees 9,048
Prospectus and shareholders' reports 8,804
Custodian fees 4,898
Directors' fees and expenses--Note 2(c) 2,583
Registration fees 157
Miscellaneous 6,918
-----------
270,048
Less--reduction in management fee due to undertakings--Note 2(a) 73,245
-----------
Total Expenses 196,803
-----------
INVESTMENT INCOME--NET 741,475
NET UNREALIZED APPRECIATION ON INVESTMENTS 2,338
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $743,813
===========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Dreyfus Michigan Municipal Money Market Fund, Inc.
Statement of Changes in Net Assets
Year Ended Six Months Ended
September 30, March 31, 1994
1993 (Unaudited)
----------------------------------
<S> <C> <C>
OPERATIONS:
Investment income--net $1,617,282 $741,475
Net realized (loss) on investments (1,083) --
Net unrealized appreciation on investments for the period 835 2,338
----------- -----------
Net Increase In Net Assets Resulting From Operations 1,617,034 743,813
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net (1,617,282) (741,475)
----------- -----------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 67,367,953 39,859,108
Dividends reinvested 1,446,726 666,439
Cost of shares redeemed (78,881,897) (41,936,103)
----------- -----------
(Decrease) In Net Assets From Capital Stock Transactions (10,067,218) (1,410,556)
----------- -----------
Total (Decrease) In Net Assets (10,067,466) (1,408,218)
NET ASSETS:
Beginning of period 83,024,801 72,957,335
----------- -----------
End of period $72,957,335 $71,549,117
=========== ===========
See independent accountants' review report and notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Dreyfus Michigan Municipal Money Market Fund, Inc.
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from information provided in the Fund's
financial statements.
Year Ended September 30, Six Months Ended
------------------------------------------ March 31, 1994
PER SHARE DATA: 1990(1) 1991 1992 1993 (Unaudited)
--------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.0000 $1.0000 $1.0000 $.9999 $.9999
--------- --------- --------- --------- ---------
Investment Operations:
Investment income--net .0132 .0507 .0313 .0209 .0101
Net realized and unrealized gain (loss)
on investments -- -- (.0001) -- .0001
--------- --------- --------- --------- ---------
Total from Investment Operations .0132 .0507 .0312 .0209 .0102
--------- --------- --------- --------- ---------
Distributions;
Dividends from investment income--net (.0132) (.0507) (.0313) (.0209) (.0101)
--------- --------- --------- --------- ---------
Net asset value, end of period $1.0000 $1.0000 $.9999 $.9999 $1.0000
========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN 6.07%(2) 5.19% 3.17% 2.11% 2.03%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- .03% .41% .58% .54%(2)
Ratio of net investment income
to average net assets 6.21%(2) 4.87% 3.18% 2.09% 2.02%(2)
Decrease reflected in the above expense
ratios due to undertakings by the Manager 2.78%(2) .74% .33% .20% .20%(2)
Net Assets, end of period (000's Omitted) $19,929 $102,707 $83,025 $72,957 $71,549
- ------------
(1) From July 13, 1990 (commencement of operations) to September 30, 1990.
(2) Annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
Dreyfus Michigan Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. Dreyfus
Service Corporation ("Distributor") acts as the exclusive distributor of
the Fund's shares, which are sold to the public without a sales charge.
The Distributor is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager").
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so.
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the
fair value of the Fund's investments.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Interest income,
adjusted for amortization of premiums and, when appropriate, discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Realized gain and loss from securities transactions are recorded
on the identified cost basis.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and
certain of its public bodies and municipalities may affect the ability of
issuers within the state to pay interest on, or repay principal of,
municipal obligations held by the Fund.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain, if any, are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the
Internal Revenue Code. To the extent that net realized capital gain can
be offset by capital loss carryovers, it is the policy of the Fund not to
distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax
exempt dividends, by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of income and net realized
capital gain sufficient to relieve it from all, or substantially all,
Federal income taxes.
The Fund has an unused capital loss carryover of approximately $4,200
available for Federal income tax purposes to be applied against future
net securities profits, if any, realized subsequent to September 30,
1993. The carryover does not include net realized securities losses from
November 1, 1992 through September 30, 1993, which are treated, for
Federal income tax purposes, as arising in fiscal 1994. If not applied,
$700 of the carryover expires in fiscal 2000, and $3,500 expires in
fiscal 2001.
At March 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .50 of 1% of the
average daily value of the Fund's net assets and is payable monthly. The
Agreement provides for an expense reimbursement from the Manager should
the Fund's aggregate expenses, exclusive of taxes, brokerage, interest on
borrowings and extraordinary expenses, exceed the expense limitation of
any state having jurisdiction over the Fund for any full fiscal year.
However, during the six months ended March 31, 1994, the Manager had
undertaken to waive receipt of the management fee payable to it by the
Fund in excess of an annual rate of .20 of 1% of the Fund's average daily
net assets. The reduction in management fee, pursuant to the undertaking,
amounted to $73,245 for the six months ended March 31, 1994.
Dreyfus Michigan Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2--Management Fee and Other Transactions With Affiliates
(continued):
The Manager may modify the expense limitation percentages from time to
time, provided that the resulting expense reimbursement would not be less
than the amount required pursuant to the Agreement.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
the Distributor an amount not to exceed an annual rate of .25 of 1% of
the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. During the
six months ended March 31, 1994, the Fund was charged an aggregate of
$13,549 pursuant to the Shareholder Services Plan.
(c) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each
director who is not an "affiliated person" receives an annual fee of
$1,000.
(d) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the
Manager with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory
approvals and approvals of the stockholders of the Manager and of Mellon.
The merger is expected to occur in mid-1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's board
and shareholders before completion of the merger. Shareholder approval
will be solicited by a proxy statement.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Review Report of Ernst & Young, Independent Accountants
Shareholders and Board of Directors
Dreyfus Michigan Municipal Money Market Fund, Inc.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Michigan Municipal Money Market Fund, Inc., including the
statement of investments, as of March 31, 1994, and the related
statements of operations and changes in net assets and financial
highlights for the six month period ended March 31, 1994. These
financial statements and financial highlights are the responsibility of
the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the objective
of expressing an opinion regarding the financial statements and financial
highlights taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial
highlights referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year
ended September 30, 1993 and financial highlights for each of the four
years in the period ended September 30, 1993 and in our report dated
November 3, 1993, we expressed an unqualified opinion on such statement
of changes in net assets and financial highlights.
New York, New York
May 9, 1994
Dreyfus Michigan Municipal
Money Market Fund, Inc.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
110 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
The Shareholder Services
Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 102SA943
DREYFUS
MICHIGAN MUNICIPAL MONEY MARKET FUND, INC.
SEMI-ANNUAL REPORT
March 31, 1994
